Small firms captive in a box like lobsters

The paper empirically investigates whether a lack of competition determines the poor productivity performance of the European business services. It uses detailed panel data for 13 EU countries over the period 2000-2005. We apply parametric and nonparametric methods to estimate the productivity frontier and subsequently explain the distance to the productivity frontier by market characteristics, entry and exit dynamics and national regulation. We find that the most efficient scale in business services is close to 20 employees. Scale inefficiencies show a hump-shape pattern with strong potential scale economies for the smallest firms. Nonetheless, some 95% of the firms operate at a scale below the minimal optimal scale. While they are competitive in the sense that their productivities are very similar, they have strong scale diseconomies compared to the larger firms. Their scale inefficiency is persistent over time, which points to growth obstacles that hamper the achievement of scale economies. Regulation characteristics explain this inefficiency; in particular, regulation-caused exit and labour reallocation costs are found to have a large negative impact on productivity performance.

Market structure, productivity and scale in European business services

Using data from 11 EU countries, the paper investigates the impact of scale economies on labour productivity in European business services. Moreover, it analyses whether the incidence of scale sub-optimality is related to characteristics of the market or to national regulation characteristics. The econometric analysis is based on a production function model in combination with a distance-to-the-frontier model. We find evidence for the existence of increasing returns to scale in business services firms. A result is that throughout the EU, business-services firms with less than 20 employed persons have a significantly lower level of labour productivity than the rest of the business-services industry. Two factors explain the scale inefficiencies. The first is the level of policy-caused firm-entry costs; higher start-up costs for new firms go along with more scale inefficiency. Secondly, business-services markets tend to be segmented by firm size: firms tend to compete predominantly with firms in their own size segment of the markets. Scale-related inefficiencies are to some extent compensated by more competition within a firm's own size segment. If a firm operates in a more “crowded” segment this has a significant and positive impact on its labour productivity. We derive some policy implications from our findings.EU, business services, scale efficiency, labour productivity, regulation, entry costs

Competitive, but too small - productivity and entry-exit determinants in European business services

The paper investigates whether scale effects, market structure, and regulation determine the poor productivity performance of the European business services industry. We apply parametric and nonparametric methods to estimate the productivity frontier and subsequently explain the distance of firms to the productivity frontier by market characteristics, entry- and exit dynamics and national regulation. The frontier is assessed using detailed industry data panel for 13 EU countries. Our estimates suggest that most scale advantages are exhausted after reaching a size of 20 employees. This scale inefficiency is persistent over time and points to weak competitive selection. Market and regulation characteristics explain the persistence of X-inefficiency (sub-optimal productivity relative to the industry frontier). More entry and exit are favourable for productivity performance, while higher market concentration works out negatively. Regulatory differences also appear to explain part of the business services' productivity performance. In particular regulation-caused exit and labour reallocation costs have significant and large negative impacts on the process of competitive selection and hence on productivity performance. Overall we find that the most efficient scale in business services is close to 20 employees and that scale inefficiencies show a hump-shape pattern with strong potential scale economies for the smallest firms and diseconomies of scale for the largest firms. The smallest firms operate under competitive conditions, but they are too small to be efficient. And since this conclusion holds for about 95 out of every 100 European business services firms, this factor weighs heavily for the overall productivity performance of this industry

ICT, Innovation and Business Performance in Services: Evidence for Germany and the Netherlands

Using panel data for German and Dutch firms from the services sector, this paper analyses the importance of ICT capital deepening and innovation for productivity. We employ a model that takes into account that innovation and ICT use may be complementary. The results show that the contribution of ICT capital deepening is raised when firms combine ICT use and technological innovations on a more permanent basis. Moreover, the joint impact of ICT use and permanent technological innovation on productivity appears to be of the same order of magnitude in the two countries. However, the direct impacts of innovation on multi-factor productivity seems to be more robust for Germany than for the Netherlands. --Productivity,Information and Communication Technologies,Innovation,Services,Panel Data

Competitive, but too small - productivity and entry-exit determinants in European business services

The paper investigates whether scale effects, market structure, and regulation determine the poor productivity performance of the European business services industry. We apply parametric and nonparametric methods to estimate the productivity frontier and subsequently explain the distance of firms to the productivity frontier by market characteristics, entry- and exit dynamics and national regulation. The frontier is assessed using detailed industry data panel for 13 EU countries. Our estimates suggest that most scale advantages are exhausted after reaching a size of 20 employees. This scale inefficiency is persistent over time and points to weak competitive selection. Market and regulation characteristics explain the persistence of X-inefficiency (sub-optimal productivity relative to the industry frontier). More entry and exit are favourable for productivity performance, while higher market concentration works out negatively. Regulatory differences also appear to explain part of the business services' productivity performance. In particular regulation-caused exit and labour reallocation costs have significant and large negative impacts on the process of competitive selection and hence on productivity performance. Overall we find that the most efficient scale in business services is close to 20 employees and that scale inefficiencies show a hump-shape pattern with strong potential scale economies for the smallest firms and diseconomies of scale for the largest firms. The smallest firms operate under competitive conditions, but they are too small to be efficient. And since this conclusion holds for about 95 out of every 100 European business services firms, this factor weighs heavily for the overall productivity performance of this industry.productivity; frontier models; scale; industry dynamics; regulation; European Union; business services

The Solar Neighborhood. XXVI. AP Col: The Closest (8.4 pc) Pre-Main-Sequence Star

We present the results of a multi-technique investigation of the M4.5Ve flare star AP Col, which we discover to be the nearest pre-main-sequence star. These include astrometric data from the CTIO 0.9m, from which we derive a proper motion of 342.0+/-0.5 mas yr^-1, a trigonometric parallax of 119.21+/-0.98 mas (8.39+/-0.07 pc), and photometry and photometric variability at optical wavelengths. We also provide spectroscopic data, including radial velocity (22.4+/-0.3 km s^-1), lithium Equivalent Width (EW) (0.28+/-0.02 A), H-alpha EW (-6.0 to -35 A), {\it vsini} (11+/-1 km s^-1), and gravity indicators from the Siding Spring 2.3-m WiFeS, Lick 3-m Hamilton echelle, and Keck-I HIRES echelle spectrographs. The combined observations demonstrate that AP Col is the closer of only two known systems within 10 pc of the Sun younger than 100 Myr. Given its space motion and apparent age of 12-50 Myr, AP Col is likely a member of the recently proposed ~40 Myr old Argus/IC 2391 association.Comment: 31 pages, 11 figure

Refined stellar, orbital and planetary parameters of the eccentric HAT-P-2 planetary system

We present refined parameters for the extrasolar planetary system HAT-P-2 (also known as HD 147506), based on new radial velocity and photometric data. HAT-P-2b is a transiting extrasolar planet that exhibits an eccentric orbit. We present a detailed analysis of the planetary and stellar parameters, yielding consistent results for the mass and radius of the star, better constraints on the orbital eccentricity, and refined planetary parameters. The improved parameters for the host star are M_star = 1.36 +/- 0.04 M_sun and R_star = 1.64 +/- 0.08 R_sun, while the planet has a mass of M_p = 9.09 +/- 0.24 M_Jup and radius of R_p = 1.16 +/- 0.08 R_Jup. The refined transit epoch and period for the planet are E = 2,454,387.49375 +/- 0.00074 (BJD) and P = 5.6334729 +/- 0.0000061 (days), and the orbital eccentricity and argument of periastron are e = 0.5171 +/- 0.0033 and omega = 185.22 +/- 0.95 degrees. These orbital elements allow us to predict the timings of secondary eclipses with a reasonable accuracy of ~15 minutes. We also discuss the effects of this significant eccentricity including the characterization of the asymmetry in the transit light curve. Simple formulae are presented for the above, and these, in turn, can be used to constrain the orbital eccentricity using purely photometric data. These will be particularly useful for very high precision, space-borne observations of transiting planets.Comment: Revised version, accepted for publication in MNRAS, 11 pages, 6 figure

Two Exoplanets Discovered at Keck Observatory

We present two exoplanets detected at Keck Observatory. HD 179079 is a G5 subgiant that hosts a hot Neptune planet with Msini = 27.5 M_earth in a 14.48 d, low-eccentricity orbit. The stellar reflex velocity induced by this planet has a semiamplitude of K = 6.6 m/s. HD 73534 is a G5 subgiant with a Jupiter-like planet of Msini = 1.1 M_jup and K = 16 m/s in a nearly circular 4.85 yr orbit. Both stars are chromospherically inactive and metal-rich. We discuss a known, classical bias in measuring eccentricities for orbits with velocity semiamplitudes, K, comparable to the radial velocity uncertainties. For exoplanets with periods longer than 10 days, the observed exoplanet eccentricity distribution is nearly flat for large amplitude systems (K > 80 m/s), but rises linearly toward low eccentricity for lower amplitude systems (K > 20 m/s).Comment: 8 figures, 6 tables, accepted, Ap

Towards a fully consistent Milky Way disc model: Part 1 The local model based on kinematic and photometric data

We present a fully consistent evolutionary disc model of the solar cylinder. The model is based on a sequence of stellar sub-populations described by the star formation history (SFR) and the dynamical heating law (given by the age-velocity dispersion relation AVR). The combination of kinematic data from Hipparcos and the finite lifetimes of main sequence (MS) stars enables us to determine the detailed vertical disc structure independent of individual stellar ages and only weakly dependent on the IMF. The disc parameters are determined by applying a sophisticated best fit algorithm to the MS star velocity distribution functions in magnitude bins. We find that the AVR is well constrained by the local kinematics, whereas for the SFR the allowed range is larger. A simple chemical enrichment model is included in order to fit the local metallicity distribution of G dwarfs. In our favoured model A the power law index of the AVR is 0.375 with a minimum and maximum velocity dispersion of 5.1 km/s and 25.0 km/s, respectively. The SFR shows a maximum 10 Gyr ago and declines by a factor of four to the present day value of 1.5 M_sun/pc^2/Gyr. A best fit of the IMF leads to power-law indices of -1.46 below and -4.16 above 1.72 M_sun avoiding a kink at 1 M_sun. An isothermal thick disc component with local density of ~6% of the stellar density is included. A thick disc containing more than 10% of local stellar mass is inconsistent with the local kinematics of K and M dwarfs.Comment: 20 pages, 18 figs., accepted by MNRA

Low Mass Stars and Brown Dwarfs in Praesepe

Presented are the results of a large and deep optical-near-infrared multi-epoch survey of the Praesepe open star cluster using data from the UKIDSS Galactic Clusters Survey. Multiple colour magnitude diagrams were used to select potential members and proper motions were used to assign levels of membership probability. From our sample, 145 objects were designated as high probability members (p >= 0.6) with most of these having been found by previous surveys although 14 new cluster members are also identified. Our membership assignment is restricted to the bright sample of objects (Z < 18). From the fainter sample, 39 candidates were found from an examination of multiple colour magnitude plots. Of these, 2 have small but significant membership probabilities. Finally, using theoretical models, cluster luminosity and mass functions were plotted with the later being fitted with a power law of alpha = 1.11 +/- 0.37 for the mass range 0.6 to 0.125 Msun and an assumed cluster age of 500 Myrs in the UKIDSS Z photometric band. Likewise taking an assumed cluster age of 1 Gyr we find alpha = 1.10 +/- 0.37. Similar values were also found for the J and K bands. These results compare favourably with the result of Kraus & Hillenbrand (2007) (alpha = 1.4 +/- 0.2) but are significantly lower than that of the more recent study conducted by Boudreault et al. (2009) (alpha = 1.8 +/- 0.1).Comment: 21 pages, 11 figures, 3 tables and 4 appendices. Accepted for publication in MNRAS, corrected a missing referenc